A wealthy, highly diversified economy. High fiscal flexibility, underpinned by low general government debt. A long-standing democracy producing stable majorities and a powerful executive. Structural fiscal deficits in excess of the 'AAA' median. A rapid increase in household indebtedness. The United Kingdom (U.K.) recorded its 13th year of uninterrupted annual economic growth in 2004. In this extended period, the growth performance has outshone that of its 'AAA' rated peers, with the U.K. proving more successful at weathering the global economic downturn at the start of the current decade. That said, whereas past performance has been driven by job growth, bringing the unemployment rate down to historical lows, future growth will increasingly need to be driven by improvements in labor productivity.
